This happened at our DGCs' school and I had similar mixed feelings. No-one seemed to object, indeed, I think many were grateful for guidance.
At a tactful school (and ours is excellent) someone will be making sure that there will be a quiet word to anyone who is struggling to find something appropriate. Mostly though, it is not about cost (there are only a very few who don't have / can't get plain trousers & shirt from a charity shop) but about the kind of inappropriate dressing described above.
Personally, I don't really care, but as posters have pointed out, a 'laissez-faire' attitude may mean the kids have no idea as they get older, and it can hamper them.
Having said that, when our kids were at school, in a very mixed area, the parents dressed appropriately, apart from one dad who was an 'on call' breakdown driver. We all knew this, he was as neat and clean as possible, given he was in work clothing, and we were glad to see him there. Easier for the district nurses and midwives whose 'on call' clothes looked more normal.
I also think there may be some children whose parents don't want to support such events, and I hope the school can be helpful (it was, as many of us recall, always thus)
As for Tedber's point - they had a choice as to whether to book that holiday or another one!